Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

IMAX Warms Up for the Summer Movie Slate

First-quarter earnings are in, and they preview what should be a strong summer at the box office.

This has already been a much better year at the box office for filmmakers than 2011 was. Following a year with very few highlights, Lions Gate Entertainment's (NYSE: LGF)The Hunger Gameshas captured the attention of audiences worldwide, and there's more where that came from. Disney(NYSE: DIS) releases The Avengers in early May, Sony(NYSE: SNE) has sequels to Men in Black, Spider-Man, and James Bond (the 23rd film in that franchise) coming out. To round out the action-filled summer, Time Warner will release the highly anticipated Batman flick The Dark Knight Rises in July.

All of this action has movie companies' hopes up and should benefit IMAX(NYSE: IMAX) and RealD's(NYSE: RLD) formats. IMAX's recently released first-quarter results give us our first peek into what should be a strong year.

By the numbersFirst-quarter box office was up 95% from 2011 to $121.7 million, driven by Mission: Impossible -- Ghost Protocol, which spilled over from 2011. Revenue for IMAX grew 23% to $55.6 million, and adjusted net income was $4.0 million, or $0.06 per share. That was a penny below expectations, but revenue topped expectations, and the summer is where the rubber really meets the road.

Recurring vs. non-recurring revenuesIf you're an owner of IMAX, the best thing you could have seen this quarter was a dramatic increase in recurring revenue. This is revenue from the movies themselves, of both the Digital Media Remastering and joint-venture varieties, instead of one-time sales of equipment. Box-office success, along with a move to more joint ventures, has driven this increase in recurring revenue.

During the first quarter of 2012, recurring revenues grew 75.1% to $35.2 million, 63.3% of total revenue.

DifferentiationIMAX is using IMAX cameras, its unique aspect ratio, and early release windows to push differentiation in 10 of its films for 2012 and 2013. The Dark Knight Rises has more than an hour filmed with IMAX cameras, something that helped Mission: Impossible in IMAX. This should also help the company capture a higher percentage of box office than it normally would and drive interest in the brand.

What to expect this yearExpectations for IMAX only increase from here, so the pressure is heating up. Analysts expected just $0.07 in earnings per share in the first quarter, but that bumps to $0.24 in the second quarter and $0.98 for the full year. Action films need to live up to expectations -- starting with The Avengers next week -- for IMAX to reach these numbers.